U.S. Securities and Exchange Commission
Comments on Proposed Rule: Acceleration of Periodic Report Filing Dates
File No. S7-08-02
May 23, 2002
I am opposed to the U.S. Securities and Exchange Commission's Proposed Rule: Acceleration of Periodic Report Filing Dates. Acceleration of periodic report filing dates can not be achieved without sacrificing accuracy or completeness of filed information, would inherently increase late filings of the reports, and will not benefit investors and the capital market by increasing the due date by 15 and 20 days.
Acceleration of periodic report filing dates can not be achieved without sacrificing accuracy or completeness of filed information. The use of estimates and assumptions will increase in order for companies to comply with the proposed filing dates. The SEC has recognized that companies and their auditors have developed efficiencies over the years that allow companies to generate financial data quickly, but the information disclosed prior to the reports filed to the SEC is condensed information and requires less audit procedures to be performed. Implementing the proposed filing dates would cause omission of necessary review procedures that ensure the filing of accurate and complete information. Reported information is reviewed, at a minimum, by management, the audit committee, the Board of Directors, external public accountants and external counsel after the compilation and preparation of the information. These important review procedures will have to be revised, shortened, or omitted if the SEC requires filing of this information within 30 days.
Acceleration of periodic report filing dates would inherently increase late filings of the reports. I utilize all of the time allowed to file our periodic reports. If the due date is shortened, then every SEC report will hopefully be filed on the due date, not earlier. The accelerated filing date does not allow a company for time schedule deviations. Normal employee turnover in the corporate sector has increased over the years. If a company experiences normal employee turnover in personnel reporting to the SEC, then the reports are likely to be filed late. Your cost analysis estimates that 75% of the reporting burden is prepared by outside advisors, which is more difficult for a company to control than internal reporting. Therefore, complying with the accelerated filing dates will be more demanding and would be frustrating for company management if late filings occur when the majority of the reporting burden is external.
Acceleration of periodic report filing dates will not benefit investors and the capital market by increasing the due date by 15 and 20 days. The SEC recognize that companies already file well before the required due date, so investors are receiving timely information. I highly doubt that accelerating the due date by fifteen days is going to change investor's investing habits. Also, investors are not going to be protected from deceptive reporting by changing the due dates of the reports because corrupt companies will have a series of inaccurate reports, not just the latest report that causes the investor to recognize uncertainty and would be imperative that the reports be filed fifteen days sooner than the current filing requirements.
The financial cost, personnel burden and sacrifice of accurate and complete information exceeds the benefit of investor's receiving insufficient information fifteen days earlier. I do not believe that investors want less than standard information and accelerating the filing dates will reduce the level and quality of information reported. I do not recommend that the SEC implement the proposed rule to accelerate to periodic report filing dates.
Concerned SEC Registrant,
Leann L. Hubbard, CPA
telephone: (208) 750-7114
facsimile: (208) 750-7115